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Monday's Movers

Reversing Recent Losses, the Market Gains

By

Howard J. Godfrey

Sept. 29, 2003 6:34 p.m. ET

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AFTER FOUR DOWN TRADING SESSIONS, all three major U.S. market indexes gained Monday on the strength of some positive economic news. The Dow Jones Industrial Average rose 67.16, or 0.72%, to close at 9380.24.

The market rebound was led by the chipmakers following an announcement by the Semiconductor Industry Association that worldwide chip sales were up 4% in August, marking the sixth consecutive monthly increase. Year-over-year revenue rose 12.5% from $11.93 billion in August 2002. The jump in sales is attributed to an increased demand from the wireless sectors.

The Commerce Department reported that personal consumption increased 0.8% last month after rising by a revised 0.9% in July, and income rose by 0.2% after climbing a revised 0.3% in July. The results came in slightly below forecasts for 0.9% growth in consumption and 0.3% growth in income, but this was offset by upward revisions in the July results.

Meanwhile, the tech-heavy Nasdaq Composite Index jumped 32.49, or 1.81%, to 1824.56. The Standard & Poor's 500 Index gained 9.73, or 0.98%, to close at 1006.58. On the New York Stock Exchange, advancers outpaced decliners: 2,264 stocks rose and 983 fell. More than 1.32 billion shares changed hands on the Big Board, down from 1.43 billion on Friday.

The price of the 10-year Treasury bond fell 1/2, while the yield rose to 4.07%. Bond prices move inversely to yields.

Speaking of chipmakers, the Barron'sTech Trader column took a look at some of the latest plans by
Intel.
The semiconductor maker is planning to put wireless radios in every computer and consumer electronic product it can.

By the end of 2003, Intel expects to have caught up with its wireless rivals by increasing the speed of its WiFi chips from 11 million bits per second to 54 million. Intel foresees PCs and powerful hand-held devices that can handle data, voice calls and entertainment programming.

Intel is targeting telecom suppliers that traditionally designed their own chips, by adhering to a new industry standard these telecoms will be able to mix and match their circuit boards. Intel's shares rose 1.10, or 4.03%, to 28.37.

The cover story, "Strong Signals," examined the prospects for
Nokia,
the world's top cell phone maker. Its shares have not benefited from the recent run-up by tech stocks.

On the year, Nokia's shares have risen only 2%, compared with 50% jumps by other big tech companies. Among the 30 largest hardware stocks, Nokia's gains rank last.

Critics of the company fear that Nokia will not be able to maintain its global market share lead and that it cannot continue to produce operating margins on its handsets that exceed 20%. There is also the concern of falling cellphone prices.

The article pointed out that cellphone sales will continue to climb as new markets are entered such as Russia and India and expansion continues within China. Nokia is also readying some new products, including its N-Gage handheld device that plays games, surfs the Web, makes calls and handles email to tap into the market for faster phones with "nifty features."

Nokia is working hard to improve its offerings in the CDMA-based cellphone network, in which it holds an 11% share. But supporters believe it can advance to dominate this market as it has the GSM cell phone sector.

Some believe that Nokia's stock represents bargain, and on the day its ADRs rose 0.64, or 4.19%, to 15.90.

Another Barron's feature, "High Style," noted fashion maven Ralph Lauren has been winning plaudits for his latest line of clothing and wondered if the accolades can translate into applause for the stock.

Polo Ralph Lauren
has embarked on several new strategies that could spur long-term growth, including expansion of its international and retail franchises and the relaunch of its women's collection. Polo is seeking to buy back various licenses and regain control of its brand.

Polo trades at 15 times 2004 estimates, which is less than other luxury brands. It has managed to reduce its long-term debt from 22.2% of total capital to 17%, and it recently announced plans for a 20-cent per share annual dividend. Its stock gained 0.37, or 1.40%, to 26.77.

Other stocks mentioned in this week's Barron's include
Motorola,
which fell 0.23 to 12.30;
United Technologies,
which gained 1.25 to 79.26, and
Verizon,
which edged up 0.09 to 32.68.

Howard J. Godfrey is a senior editor with the Wall Street Journal Interactive and Barron's Online

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